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23 July 2014 Internal T.I. 2014-0525231I7- Foreign tax credit-- summary under Article 24 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 24 s. 40(3) gain had Cdn source because not taxed in Japan Canco paid Japanese income tax on the capital gain reported on the distribution by it of its shares of a Japanese subsidiary ("Forco") to its non-resident parent as a dividend-in-kind, and claimed a foreign tax credit against the Canadian income tax payable on the taxable portion of the s. 40(3) gain realized as a result of a dividend distribution from Forco earlier in the year. After concluding that Canco would not be entitled to a FTC on the basis inter alia that "a taxable capital gain resulting from a deemed disposition of property is considered to be Canadian-source income, which therefore cannot be included in the foreign non-business income for purposes of claiming a FTC," the Directorate went on to state: Article 21 [of the Canada-Japan Treaty] deems gains of a resident of Canada, which are taxed in Japan under the Convention, to arise from a source in Japan and requires Canada to provide a credit in respect of such Japanese tax against any Canadian tax payable on such gains. ...

6 July 2012 Internal T.I. 2012-0440741I7- stock option benefit derived by US resident-- summary under Subparagraph 115(1)(a)(i) Summary Under Tax Topics- Income Tax Act- Section 115- Subsection 115(1)- Paragraph 115(1)(a)- Subparagraph 115(1)(a)(i) USCo, which is a qualifying person for purposes of the Canada-US Income Tax Convention and is a wholly-owned subsidiary of a Canadian public company, employed a US-resident individual and performed employment duties for USCo in Canada for 55, 100 and 75 days in 2009, 2010 and 2011, respectively. ... Before considering the effect of the Canada-US Convention, CRA stated that Canada's default position regarding the allocation of the stock option benefit is that a stock option benefit is allocable to the services rendered in the year of grant, unless it is clear from the circumstances that some other period is more appropriate, and vesting is not relevant. ...

11 December 2002 Internal T.I. 2002-0173007 F- Observation aux commentaires (OCDE)-- summary under Article 12 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 12 Canada’s withdrawal of its observation on Art. 12 on March 28, 2002 was prospective, and did not affect its right to impose withholding tax on payments for use of a secret process prior to that date The TSO proposed to impose withholding tax (at a Treaty-reduced rate of 10%) on consideration paid prior to March 28, 2002 by a Canadian resident, for the granting by a UK resident of permanent non-exclusive licences allowing the Canadian resident to use, download, execute, employ and store software owned by the non-resident, on the basis that the payments met the definition of "royalties" in Art. 12(4) of the Canada-UK convention, since they were regarding the use of a secret formula or process. ...

9 July 2021 Internal T.I. 2021-0893981I7- CERB received by non-residents-- summary under Article 15 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 15 Other Income Art. accords Canada full right to tax CERB payments Regarding the treatment of payments (“CERB Payments”) made pursuant to the Canada Emergency Response Benefit Act (the “CERB Act”) to an individual who was a non-resident of Canada for purposes of the Act and Art. IV of Canada’s Income Tax Conventions, the Directorate, after indicating that the CERB Payments were required by ss. 56(1)(r)(iv.1) and 115(1)(a)(iii.22) to be included in computing the taxable income earned in Canada of the non-resident, noted that Art. 15 (Employment Income) of a relevant Treaty will not govern the CERB Payments (there is no employer-employee relationship between the payor and the payee) and (analogously to employment insurance compensation) the “Other Income” Article of the relevant Treaty will apply to determine whether Canada can maintain its right to tax the CERB Payments. ...

14 July 2022 Internal T.I. 2020-0869441I7- Article XVI(4) of Canada-US Treaty-- summary under Article 16 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 16 a US athlete’s Canadian “signing bonus” was in substance employment remuneration for Treaty purposes A U.S. ... Convention rather than the Canadian tax rate being limited under Art. ...

Income Tax Convention, a portion of the income from Canco'’s Canadian XX business must be re-sourced to the U.S. for the purposes of section 126 of the Act. ... CRA went on to find that, given that gains or losses on the shares were not subject to Canadian income tax by virtue of the Convention, they were deemed by s. 126(6)(c) to be a separate source for purposes of s. 126. ...

11 April 2014 Internal T.I. 2013-0474851I7 F- Permanent establishment in Canada-- summary under Article 5 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 5 equipment installation project of Franceco lasting more than 12 months including preparing specs and final testing Franceco was engaged to install specialized equipment purchased by an arm's length Canadian company (Canco) for modernizing and expanding the capacity of its Canadian factory (the "Project"). ... Respecting whether the Project was an installation project for purposes of Art. 5, para. 3 of the Canada-France Convention, the Directorate stated (TaxInterpretations translation) that "Franceco undertook not only to supervise the tasks accomplished by the local sub-contractors, but also had the general responsibility to undertake the equipment installation" and that the "presence of the employees of Franceco in Canada was essential as their expertise was required to achieve the Project. ...

6 July 2012 Internal T.I. 2012-0440741I7- stock option benefit derived by US resident-- summary under Paragraph 153(1)(a) Summary Under Tax Topics- Income Tax Act- Section 153- Subsection 153(1)- Paragraph 153(1)(a) employer reimburser of stock option benefit amount subject to withholding obligation USCo, which is a qualifying person for purposes of the Canada-US Income Tax Convention and is a wholly-owned subsidiary of a Canadian public company, employed a US-resident individual who performed employment duties for USCo in Canada for 55, 100 and 75 days in 2009, 2010 and 2011, respectively. ... After noting that the stock option benefit would be exempt from Canadian tax under the exemption in para. 2 of Article XV of the Canada-US Convention, CRA asserted that this did not relieve USCo of its source deduction obligations: The corporation that has agreed to sell or issue the shares to the employee (in this case, Canco) will be considered to be the "payer" of the stock option benefit for purposes of paragraph 153(1)(a) (and will be responsible for the normal withholding), unless it receives reimbursement, in whole or in part, either directly or indirectly, in respect of the benefit. ...

16 June 2020 Internal T.I. 2019-0792651I7- 10(8) of the Canada-UK Tax Treaty-- summary under Article 10 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 10 engaging the “one of the main purposes” test in Art. 10(8) of the Canada-UK Treaty for accessing reduced withholding resulted in a 25% withholding rate Art, 10(8) of the Canada-U.K. Convention provides: The provisions of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the shares or other rights in respect of which the dividend is paid to take advantage of this Article by means of that creation or assignment. ...

Convention. ...